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 Aetna and Anthem said their individual insurance businesses, which
include the plans created by President Barack Obama's national
healthcare reform law, had performed in line with projections
through October. Both backed their earnings forecasts for 2015.
The announcements came the day after UnitedHealth cut its earnings
forecast and said it might exit the Obamacare exchanges in 2017. It
said it was losing money on that business because of low enrollment
and high costs.
Anthem remains committed to the exchanges and to "continuing our
dialogue with policymakers and regulators regarding how we can
improve the stability of the individual market," Chief Executive
Officer Joseph Swedish said in a statement.
Enrollment for 2016 exchange plans opened earlier this month.
In October, the U.S. Department of Health and Human Services
forecast about 10 million people would have plans next year,
significantly below industry expectations of 20 million. Enrollment
in 2015 also fell short of initial goals, and insurers say that
trend has made it difficult to price their plans.
About a dozen start-up cooperative insurers have collapsed this
year, driven out of the business by paying more medical claims than
expected. Also, government payments to mitigate the costs of
insuring sicker-than-expected members are declining and will be
mostly phased out after next year.
Aetna shares, which had fallen 7 percent on Thursday, rose 4.1
percent to $103.97 on Friday. Anthem, the second-largest player on
the exchanges, was up 2.5 percent at $131.10 after dropping 9
percent the previous day, and UnitedHealth gained 2.1 percent to
$113.00 after a 6 percent decline.
Aetna said it still expected 2015 operating earnings of $7.45 to
$7.55 per share, and Anthem reiterated its outlook of $9.53 to $9.63
per share.
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Leerink Partners analyst Ana Gupte said Aetna's statement showed the
company had already factored in the individual business' challenges
to its forecasts. Aetna and Anthem had referred back to earlier
comments when asked on Thursday about UnitedHealth's commentary.
In October, Aetna had said it was not making money from the
business, which sells government-subsidized plans on exchanges
created under the U.S. Affordable Care Act but that profitability
could improve next year. It has about 815,000 members in plans on
the exchanges.
Anthem said last month that 2016 would be a challenging year on the
exchanges, where it has about 824,000 customers, and that the
business would drag on profit.
The earnings affirmations echo that of Centene Corp <CNC.N> and
Molina Healthcare Inc <MOH.N>. The small health insurers, which
focus on Medicaid, also said its exchange business was performing in
line with its expectations.
Molina CEO J. Mario Molina said that Molina was targeting low-income
people, similar to its Medicaid patients, and that it was not having
the same problems as UnitedHealth.
Kaiser Permanente, a hospital and insurer system, also said that it
was "strongly committed" to the exchanges.
(Reporting by Caroline Humer in New York and Amrutha Penumudi in
Bengaluru; Editing by Savio D'Souza, Lisa Von Ahn and Diane Craft)
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